Four key takeaways following the FCA’s partial suspension of proposed motor finance scheme
The FCA's Consumer Duty remains a central part of the regulatory framework for financial services
03/07/26
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Consumer Duty best practice: strengthening outcomes, oversight and governance
The FCA's Consumer Duty remains a central part of the regulatory framework for financial services firms.
While most firms have established the required governance, reporting and oversight arrangements, regulatory attention is increasingly focused on whether those arrangements are delivering good customer outcomes in practice. Firms need clear evidence to demonstrate that outcomes are being monitored, challenged and improved across the customer lifecycle.
The Consumer Duty is a core part of how the FCA regulates financial services firms. The Duty continues to shape supervisory activity and provides the framework through which the regulator assesses whether firms are delivering good customer outcomes in practice. Firms have spent significant time developing frameworks, governance structures and reporting approaches. The challenge now is demonstrating clearly and consistently that those arrangements are driving positive outcomes for customers.
The FCA has made clear that Consumer Duty is intended to raise standards without relying on additional prescriptive rules. As a result, firms must be able to demonstrate how their governance, oversight and decision-making processes support customer outcomes and stand up to regulatory scrutiny.
FCA expectations under the Consumer Duty
The Consumer Duty sets a higher standard of care, requiring firms to put customers’ needs first and deliver good outcomes across the customer lifecycle. This requires robust oversight, evidence and effective challenge.
Supervisory activity continues to focus on how firms apply the Consumer Duty in practice, including:
- whether products and services reflect clear customer needs
- whether price and value are justified over time
- whether communications support real customer understanding
- whether customers receive the support they need without unnecessary friction
These expectations align to the FCA’s four outcomes framework covering products and services, price and value, consumer understanding and consumer support.
Demonstrating good outcomes in practice
For many firms, the initial Consumer Duty challenge was structural: building governance frameworks, reporting arrangements and oversight processes that aligned with regulatory expectations. Increasingly, however, FCA scrutiny is focused on how those arrangements perform in practice and whether they can be shown to deliver good customer outcomes.
Boards are often required to exercise judgement using incomplete or evolving data. Stable metrics or low complaint volumes do not necessarily demonstrate that customers understand products, receive fair value or obtain appropriate support throughout their journey.
Recent FCA reviews suggest that many firms now have the right structures in place. The challenge is demonstrating how governance, monitoring and decision-making processes lead to better customer outcomes. Firms increasingly need to evidence not only what they monitor, but how insights drive actions, improvements and better customer experiences.
As a result, the emphasis has shifted from what firms have built to how those arrangements deliver outcomes in practice. This requires stronger use of management information, greater internal challenge and clearer accountability for customer outcomes.
What good Consumer Duty board reporting looks like
The Consumer Duty board report has become a key mechanism for demonstrating how firms assess, monitor and challenge customer outcomes. The FCA’s review of board reports identified that stronger firms typically:
- focus clearly on outcomes
- use good quality data
- analyse different customer groups
- link findings to actions and strategy
The regulator also identified several areas for improvement, including:
- data quality
- board challenge
- taking effective action based on insights
These findings are explored further in the FCA’s review of Consumer Duty board reports. Increasingly, effective board reporting is less about format and presentation and more about evidencing how firms assess outcomes, challenge assumptions, make decisions and act in customers’ interests.
Best practice areas firms should review
As Consumer Duty expectations continue to evolve, firms should regularly assess whether their arrangements provide sufficient evidence that good outcomes are being delivered and monitored effectively.
Areas commonly reviewed include:
- assessing whether frameworks deliver measurable customer outcomes
- reviewing fair value and product governance approaches
- strengthening outcome monitoring and management information
- producing clear, evidence-based board reporting
- reviewing customer journeys and communications against FCA expectations
Firms may also consider whether independent challenge, additional specialist resource or periodic assurance reviews could help strengthen oversight and provide greater confidence in the effectiveness of their Consumer Duty framework.
Using AI to evidence Consumer Duty outcomes
As firms seek stronger evidence of customer outcomes, many are exploring how technology and AI can supplement traditional monitoring and assurance activities.
One example is the use of AI to analyse customer interactions at scale, helping firms identify emerging risks, monitor customer understanding and build richer evidence to support Consumer Duty oversight and board reporting. TCC works with technology partner Recordsure to help firms strengthen outcome monitoring and gain deeper insight from customer interactions.
Managing Consumer Duty as an ongoing discipline
Consumer Duty is not a one-off implementation exercise. Firms are expected to continuously assess outcomes, challenge assumptions and adapt their governance and oversight arrangements as products, customer needs and regulatory expectations evolve.
Organisations that can clearly demonstrate how they monitor outcomes, respond to emerging risks and take action where required are likely to be better positioned for ongoing FCA supervision and scrutiny.
For firms seeking independent review, specialist resource or support strengthening their approach, TCC provides practical assistance across Consumer Duty governance, fair value, board reporting, customer outcomes and regulatory assurance.
Learn more about TCC’s Consumer Duty support services.